CS Disco Reports Q4 2024 Earnings with Positive Customer Growth

CS Disco’s fourth quarter 2024 earnings call revealed solid software revenue growth of 7% and an increase in high-value customers, suggesting a resilient growth trajectory. Positive trends in revenue and customer retention indicate a favorable outlook for investors.

Date: 21-02-2025

AI Rating: 7

Revenue Growth: CS Disco reported a total revenue of $144.8 million for fiscal year 2024, reflecting a growth of 5% year over year. Software revenue alone was $120.1 million, marking a 7% increase compared to the previous year. This growth indicates that the company is successfully expanding its market share within the legal technology sector.

Customer Growth: The company noted that it ended the year with 315 customers who contributed more than $100,000 in total revenue, a 9% increase year over year. Moreover, the number of customers contributing over $1 million rose, demonstrating that high-value relationships are strengthening. This trend enhances investor confidence in the company's ability to retain and expand its customer base.

Net Income: While adjusted EBITDA for the fiscal year was negative $18.7 million, there was an improvement of $7.2 million from the prior year. The company's net loss for fiscal year 2024 was reported at $17.2 million, a decrease from the previous year's loss of $22.8 million. This reduction in loss suggests improved operational efficiency, which is a positive signal for potential investors.

Revenue Retention: The report indicated a significant improvement in dollar-based net revenue retention, which increased from 92% to 96%. Furthermore, software dollar-based net revenue retention improved from 97% to 100%. This highlights the company's ability to not only acquire but also retain and expand revenue from its existing customer base.

Outlook: The company has provided guidance for fiscal year 2025, with revenue expectations in the range of $145.5 million to $157.5 million, indicating a projected growth trajectory. This optimistic guidance, coupled with efforts to reach break-even adjusted EBITDA by Q4 2026, showcases a committed approach towards sustainable profitability and growth.

Stocks: LAW